“…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
“…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
“Unintended Consequences provides a provocative interpretation of the causes of the global financial crisis and the policies needed to return to rapid growth. Whether you agree or not, this analysis is well worth reading.” - Nouriel Roubini, New York University; Chairman, Roubini Global Economics
“…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
“Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
“…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
“…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
“Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
“Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
“There are an amazing number of good ideas and interesting points made in Unintended Consequences. The thinking underlying it, and the obvious depth of understanding of the author, are very impressive.” - Steven Levitt, coauthor of Freakonomics; 2004 John Bates Clark Medal
“Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
“…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
Research on energy production, prices, electricity, grids, fuels, climate policy, technology, and the investment required to meet changing demand. Coverage connects energy systems to productivity, security, household costs, and economic growth.
AI Summary.U.S. crude oil production rose from about 5m barrels per day in the late 2000s to nearly 14m by 2025, turning the country from a major petroleum importer into a net exporter. The authors estimate that adverse oil supply news shocks, which once contracted industrial production, now expand it.
Diego Känzig, James Stock and Luca ZanottiNational Bureau of Economic Research
Date Posted:
The US shifted from a large net oil importer to a net exporter around 2010. Computing separate impulse responses pre-and post-2010, Känzig, et al find that adverse global oil-supply news switches from reducing US industrial production to raising it by a similar magnitude.
Has becoming a net oil exporter reversed how supply shocks affect output?
Core argument: Before 2010, an adverse oil supply news shock produced a persistent contraction in U.S. industrial production of roughly -0.6 percent after a year, while from 2010 onward the point estimate turns positive over most horizons and peaks near +1 percent.
As Figure 2 shows, U.S. crude oil production rose from roughly 5 million barrels per day in the late 2000s to almost 14 million barrels per day by 2025. Over the same period, net imports of crude oil and petroleum products fell steeply and turned negative in 2019. The United States thereby went from being one of the world’s largest petroleum importers to a net petroleum exporter. We examine whether the U.S. response to oil supply news shocks differs in the post-shale period by allowing the impulse responses to change from January 2010 onward. Figure 7 reports the results. Before 2010, an adverse oil supply news shock produced a persistent contraction in industrial production, reaching roughly -0.6 percent after a year. From 2010 onward, the point estimate instead becomes positive over most horizons and reaches almost +1 percent at its peak. Both the pre-2010 contraction and the post-2010 expansion are economically large and statistically significant over a range of horizons. This contrast mirrors the evidence from the time-varying VAR.
Takeaways by Macro Roundup® AI
Before 2010, an adverse oil supply news shock produced a persistent contraction in U.S. industrial production of roughly -0.6 percent after a year, while from 2010 onward the point estimate turns positive over most horizons and peaks near +1 percent.
U.S. crude oil production rose from roughly 5 million barrels per day in the late 2000s to almost 14 million barrels per day by 2025, with net imports of crude oil and petroleum products turning negative in 2019.
The pre-2010 contraction and the post-2010 expansion in U.S. industrial production following oil supply news shocks are both economically large and statistically significant over a range of horizons, mirroring evidence from a time-varying VAR.
Related Articles:
U.S. Economy Less Vulnerable To Geopolitical Oil Price Shocks Than In The Past— The United States became a net oil exporter in late 2019, and oil and oil product spending fell from near 8% of GDP in 1980 to 3% in 2024. The authors estimate a 15% global oil supply disruption would now cut annualized U.S. real GDP growth by 0.3pp, versus 1.7pp in the rest of the world.
Fighting Words: The Energy Transition in 2026— Estimates based on primary energy overstate how much electricity is needed to replace oil in passenger cars, since electric motors convert 80%-90% of electricity into motion versus about 18% for gasoline cars. Measuring useful final energy net of waste heat avoids this "primary energy fallacy": the US consumed 45 exajoules of useful final energy versus 95 exajoules of primary energy.
Power Politics: Energy Self-Sufficiency in a Modern Mercantilist World— China leads in adding power to the grid, with more than 30,000 miles of ultra-high-voltage transmission lines versus zero in the US and lead times for large transformers of 48 weeks against a US average of 143 weeks. This positions China to accommodate new demand sources such as artificial intelligence.
AI Summary.Direct carbon pricing—carbon taxes and emissions trading systems—now covers about 30% of global emissions, with most coverage coming from emissions trading systems in China and the European Union. The EU complements its system with a Carbon Border Adjustment Mechanism that prices carbon on certain high-emitting imports regardless of where they are produced.
Karen Karniol-Tambour, Jeremy Ng and Daniel HochmanBridgewater Associates
Date Posted:
Bridgewater argues that carbon pricing is increasingly becoming an industrial-policy tool, with measures such as the EU’s CBAM supporting domestic producers by limiting carbon leakage, while carbon prices encourage investment in energy efficiency and industrial upgrading.
How much of global emissions does carbon pricing now cover?
Core argument: Direct carbon pricing, spanning carbon taxes and emissions trading systems, now covers roughly 30% of global emissions, with most of that coverage coming from emissions trading systems in China and the EU.
Carbon pricing schemes have continued to grow over the last few years. Some form of direct carbon pricing now covers ~30% of global emissions—spanning both carbon taxes and emissions trading systems. Most coverage comes from emissions trading systems in China and the EU, and these schemes are increasingly being adapted to fit their specific industrial policy goals. For example, as a complement to its domestic emissions trading system, the EU has started to implement a Carbon Border Adjustment Mechanism (CBAM), which imposes carbon pricing on certain high-emitting imports regardless of where they are produced. In a world of modern mercantilism, policy makers have increasingly emphasized the need for carbon pricing schemes to support—rather than constrain—industrial competitiveness.
Takeaways by Macro Roundup® AI
Direct carbon pricing, spanning carbon taxes and emissions trading systems, now covers roughly 30% of global emissions, with most of that coverage coming from emissions trading systems in China and the EU.
The EU has begun implementing a Carbon Border Adjustment Mechanism, which imposes carbon pricing on certain high-emitting imports regardless of where they are produced, as a complement to its domestic emissions trading system.
Carbon pricing schemes are increasingly being adapted to fit specific industrial policy goals, with policy makers emphasizing that such schemes should support rather than constrain industrial competitiveness.
Related Articles:
We Are All Mercantilists Now— The postwar free-trade system depended on American soft power and broad respect for its rules, and as countries defected to mercantilist policies each defection pushed others to respond in kind. China's economic size and its use of currency management, public procurement, state subsidies and protectionism to build leading industries in electric vehicles, solar power and batteries broke the existing order.
Power Politics: Energy Self-Sufficiency in a Modern Mercantilist World— China leads in adding power to the grid, with more than 30,000 miles of ultra-high-voltage transmission lines versus zero in the US and lead times for large transformers of 48 weeks against a US average of 143 weeks. This positions China to accommodate new demand sources such as artificial intelligence.
Fighting Words: The Energy Transition in 2026— Estimates based on primary energy overstate how much electricity is needed to replace oil in passenger cars, since electric motors convert 80%-90% of electricity into motion versus about 18% for gasoline cars. Measuring useful final energy net of waste heat avoids this "primary energy fallacy": the US consumed 45 exajoules of useful final energy versus 95 exajoules of primary energy.
AI Summary.The US Gulf Coast diesel crack spread cleared $100 per barrel for the first time on record, against a normal range of $15 to $30. Because diesel is an intermediate input embedded in the delivered cost of nearly every physical good, the author argues the increase migrates with a lag into core goods and services inflation.
Torsten SløkApollo
Date Posted:
Slok notes that, unlike gasoline, “diesel is an intermediate input embedded in the delivered cost of nearly every physical good.” Diesel crack spreads thus pass through into core inflation, which “the Fed cannot ignore.”
Does a record diesel refining margin feed into core inflation?
Core argument: The US Gulf Coast diesel crack spread cleared $100/bbl in August for the first time on record, against a normal range of $15–$30.
The US Gulf Coast diesel crack spread cleared $100/bbl for the first time on record in August against a normal range of $15 to $30. Unlike a gasoline spike, which lands on consumers as a one-time tax on discretionary spending, diesel is an intermediate input embedded in the delivered cost of nearly every physical good, from freight and rail to agriculture and construction. That means the rise in diesel prices does not stay in the energy line of the CPI but migrates with a lag into core goods and services, which is exactly the kind of pass-through the Fed cannot dismiss as transitory. The bottom line is that diesel margins are now setting the long end of the curve because diesel crack spreads are an important driver of future core inflation.
Takeaways by Macro Roundup® AI
The US Gulf Coast diesel crack spread cleared $100/bbl in August for the first time on record, against a normal range of $15–$30.
Diesel is an intermediate input embedded in the delivered cost of nearly every physical good, spanning freight, rail, agriculture, and construction, unlike a gasoline spike that lands on consumers as a one-time tax on discretionary spending.
Rising diesel prices migrate with a lag out of the CPI energy line into core goods and services, a pass-through the Fed cannot dismiss as transitory, making diesel crack spreads an important driver of future core inflation.
Related Articles:
U.S. Economy Less Vulnerable To Geopolitical Oil Price Shocks Than In The Past— The United States became a net oil exporter in late 2019, and oil and oil product spending fell from near 8% of GDP in 1980 to 3% in 2024. The authors estimate a 15% global oil supply disruption would now cut annualized U.S. real GDP growth by 0.3pp, versus 1.7pp in the rest of the world.
Weeks Before the Midterms, Almost Everything Is Getting More Expensive— Wage gains have trailed inflation for five months, and consumer prices are 27% higher than at the start of 2021. The "misery index," the sum of the inflation and unemployment rates, stands at 7.5, up from 6.7 a year earlier.
Easing the Diesel Crunch Is Harder Than Keeping Planes in the Air— The refining margin for diesel averaged about $10.50 from 1985 to 2021 and never exceeded $30 even during the 2004–2008 refining boom. Because the diesel market is roughly 29.5m barrels a day versus under 8m for jet fuel, far larger shifts in refinery output are needed to move diesel supply or prices.
AI Summary.The cost of hiring the largest crude oil tankers from the Persian Gulf to Asia has risen 12-fold in months to a record $1.1m a day, reflecting the danger of crossing the Strait of Hormuz. Rates on routes far from the Middle East have also climbed 400–500%.
Javier BlasBloomberg
Date Posted:
The cost of hiring a VLCC from the Gulf to Asia has risen to $1.1mm a day, up from ~$100,000 at the start of the year. Costs on other routes not directly impacted by the US-Iran war, such as the Gulf of Mexico to Asia, have also surged 400–500% y/y.
Are soaring oil tanker rates driving the next inflation shock?
Core argument: Hiring a Very Large Crude Carrier from the Persian Gulf to Asia has risen 12-fold in a few months to a record $1.1 million a day, against the $100,000 a day shipowners earlier this year considered a superb price.
The cost of hiring the largest tankers, Very Large Crude Carriers (VLCC), from the Persian Gulf to Asia — a benchmark route — has risen 12-fold in just a few months to a record high of $1.1 million a day. Earlier this year, most shipowners would have considered $100,000 a day a superb price and $50,000 a good one. The $1-million-a-day price tag reflects the danger of crossing the Hormuz waterway and the fact that few shipowners are willing to take the risk. But costs elsewhere, even far from the Middle East, have also ballooned. The route from the Gulf of Mexico to Asia is about $338,000 a day, up 400% from a year ago; from West Africa to China stands at about $486,000 a day, an increase of nearly 500%.
Takeaways by Macro Roundup® AI
Hiring a Very Large Crude Carrier from the Persian Gulf to Asia has risen 12-fold in a few months to a record $1.1 million a day, against the $100,000 a day shipowners earlier this year considered a superb price.
The $1-million-a-day rate reflects the danger of crossing the Hormuz waterway and the fact that few shipowners are willing to take the risk.
Tanker rates far from the Middle East have also ballooned, with the Gulf of Mexico to Asia route at about $338,000 a day, up 400% from a year earlier, and West Africa to China at about $486,000 a day, up nearly 500%.
Related Articles:
U.S. Economy Less Vulnerable To Geopolitical Oil Price Shocks Than In The Past— The United States became a net oil exporter in late 2019, and oil and oil product spending fell from near 8% of GDP in 1980 to 3% in 2024. The authors estimate a 15% global oil supply disruption would now cut annualized U.S. real GDP growth by 0.3pp, versus 1.7pp in the rest of the world.
Goldman Says Gulf Oil Exports at Two-Thirds of Pre-War Level— Goldman Sachs estimates Persian Gulf crude and oil product exports have recovered to about 15–16m barrels a day, roughly two-thirds of pre-war levels and above a trough of 5–6m barrels a day, limiting the Iran war's impact on global crude prices. Transits through the Strait of Hormuz are likely close to US officials' estimates of 8–10m barrels a day.
Fighting Words: The Energy Transition in 2026— Estimates based on primary energy overstate how much electricity is needed to replace oil in passenger cars, since electric motors convert 80%-90% of electricity into motion versus about 18% for gasoline cars. Measuring useful final energy net of waste heat avoids this "primary energy fallacy": the US consumed 45 exajoules of useful final energy versus 95 exajoules of primary energy.
AI Summary.A peer-reviewed analysis of a conceptual General Fusion plant design found that, because the plant consumes energy itself, only about 40% of its electricity would be available for sale, requiring it to generate more than twice as much power as a conventional thermal plant to deliver the same amount to the grid.
Ryohtaroh SatohFinancial Times
Date Posted:
Steven Cowley, director of the Princeton Plasma Physics Laboratory, says he is “confident” that a fusion plant will be built by the end of the 2030s, but cautions it will be a “technology experiment,” not a commercial project.
How much of a fusion plant's electricity is available for sale?
Core argument: Adam Jackson’s peer-reviewed paper on General Fusion’s 2023 conceptual plant design found only about 40% of the electricity generated would be available for sale to the grid, with the rest consumed by the plant itself.
Adam Jackson, a former systems engineer at General Fusion, thinks fusion companies are unrealistic about electricity pricing. In a peer-reviewed paper published after he left, Jackson analysed a conceptual plant design by General Fusion from 2023. Because the plant itself was consuming energy, only about 40% of the electricity would be available for sale to the grid. General Fusion estimates that the cost of building and operating a fusion plant over its lifetime will be $64-$73 per MWh of electricity it produces. Commonwealth Fusion Systems, the industry’s biggest player backed by Google, has a target of about $50/MWh for its commercial plant, while stressing that the figure is a guideline. In the US, electricity from a new nuclear power plant costs about $71/MWh, while solar from a farm, rather than rooftops, may cost about $38/MWh.
Takeaways by Macro Roundup® AI
Adam Jackson’s peer-reviewed paper on General Fusion’s 2023 conceptual plant design found only about 40% of the electricity generated would be available for sale to the grid, with the rest consumed by the plant itself.
Jackson’s paper found that a fusion plant would need to generate more than twice as much electricity as a conventional thermal power plant to deliver the same amount to the grid.
General Fusion estimates lifetime build and operating costs of $64–$73/MWh and Commonwealth Fusion Systems targets about $50/MWh as a guideline, against roughly $71/MWh for electricity from a new US nuclear plant and about $38/MWh for solar farms.
Related Articles:
Moonshot Capitalism: AI Rewrites The Venture Capital Playbook— Global investment in "deep tech" — companies whose products rest on major scientific or engineering advances — has exceeded $150bn since the start of 2024, more than the $133bn invested in the decade through 2019, excluding sums poured into AI start-ups. Failed battery and electric-vehicle bets from an earlier peak illustrate the risks of such moonshot dealmaking.
China’s Scaling Prowess Comes For Fusion— China directs $1–1.5bn a year in public funding to fusion research, exceeding the roughly $900m in total annual public funding across the rest of the world, while US private fusion funding has averaged $200–500m a year with sharp swings. China's state-led stability contrasts with America's fragmented, private-sector-driven approach.
Fighting Words: The Energy Transition in 2026— Estimates based on primary energy overstate how much electricity is needed to replace oil in passenger cars, since electric motors convert 80%-90% of electricity into motion versus about 18% for gasoline cars. Measuring useful final energy net of waste heat avoids this "primary energy fallacy": the US consumed 45 exajoules of useful final energy versus 95 exajoules of primary energy.
AI Summary.The refining margin for diesel averaged about $10.50 from 1985 to 2021 and never exceeded $30 even during the 2004–2008 refining boom. Because the diesel market is roughly 29.5m barrels a day versus under 8m for jet fuel, far larger shifts in refinery output are needed to move diesel supply or prices.
Javier BlasBloomberg
Date Posted:
Given the reduction in Chinese oil imports and the ongoing wars, increasing diesel supply will be difficult. Blas argues that higher diesel prices will kill some demand and rebalance the market.
Why is diesel supply harder to rebalance than jet fuel?
Core argument: The crack spread averaged about $10.50 from 1985 to 2021 and never exceeded $30 even during the 2004–2008 refining boom driven by surging Chinese oil demand.
From 1985 to 2021, the crack spread averaged about $10.50. Even between 2004 and 2008 — the so-called golden age of refining, when Chinese oil demand exploded — it never surpassed $30. As refining has become ever more lucrative in recent months, every plant outside Russia, the Middle East and China is running as fast as it can. Unfortunately, the large size of the diesel market, at about 29.5 million barrels a day, means significant shifts in refinery output would be needed to move the dial on either supply or prices. To put this into perspective, jet fuel has a daily volume of less than 8 million barrels, so relatively small changes in refining output and airline consumption were able shift the supply and demand balance more easily. Ultimately, higher diesel prices should push demand lower, rebalancing the market — but that carries an economic cost, particularly for those countries that are more reliant on the fuel.
Takeaways by Macro Roundup® AI
The crack spread averaged about $10.50 from 1985 to 2021 and never exceeded $30 even during the 2004–2008 refining boom driven by surging Chinese oil demand.
The diesel market’s size of about 29.5 million barrels a day means significant shifts in refinery output would be needed to move either supply or prices, while every plant outside Russia, the Middle East and China runs as fast as it can.
Jet fuel’s daily volume of less than 8 million barrels allowed relatively small changes in refining output and airline consumption to shift the supply and demand balance more easily than in diesel.
Related Articles:
US Diesel Hits Record $6 A Gallon On Iran Supply Shock— US diesel pump prices reached a record $6.06 a gallon, above the prior high of $5.82, according to motorist group AAA. Diesel's role in the transport supply chain is feeding into rising producer prices, and grain farmers report that higher fuel and fertiliser costs are eating into profits.
U.S. Economy Less Vulnerable To Geopolitical Oil Price Shocks Than In The Past— The United States became a net oil exporter in late 2019, and oil and oil product spending fell from near 8% of GDP in 1980 to 3% in 2024. The authors estimate a 15% global oil supply disruption would now cut annualized U.S. real GDP growth by 0.3pp, versus 1.7pp in the rest of the world.
Fighting Words: The Energy Transition in 2026— Estimates based on primary energy overstate how much electricity is needed to replace oil in passenger cars, since electric motors convert 80%-90% of electricity into motion versus about 18% for gasoline cars. Measuring useful final energy net of waste heat avoids this "primary energy fallacy": the US consumed 45 exajoules of useful final energy versus 95 exajoules of primary energy.
AI Summary.US diesel pump prices reached a record $6.06 a gallon, above the prior high of $5.82, according to motorist group AAA. Diesel's role in the transport supply chain is feeding into rising producer prices, and grain farmers report that higher fuel and fertiliser costs are eating into profits.
Stephanie Findlay and Jamie SmythFinancial Times
Date Posted:
US retail diesel prices have climbed to an all-time nominal high of $6.06 per gallon. The previous nominal high in January 2022 would be $6.54 in current dollars.
Are record diesel prices raising producer costs and squeezing farmers?
Core argument: US diesel pump prices rose to a record $6.06 a gallon on Friday, according to AAA, exceeding the prior high of $5.82 set in 2022 after Russia's full-scale invasion of Ukraine.
The diesel pump price has surged this year and rose to $6.06 on Friday, motorist group AAA said, above the previous record high of $5.82 in 2022 following Russia’s full-scale invasion of Ukraine. Diesel’s critical role in the transport supply chain is also feeding into surging producer prices, which can stoke inflationary pressures at a time when Americans increasingly feel squeezed by affordability. The jump in diesel comes ahead of the autumn high season, where the fuel is used to power agricultural equipment to harvest and transport crops. Grain farmers in America’s Corn Belt have said they are facing a crisis with rising fuel and fertiliser prices eating into profits.
Takeaways by Macro Roundup® AI
US diesel pump prices rose to a record $6.06 a gallon on Friday, according to AAA, exceeding the prior high of $5.82 set in 2022 after Russia's full-scale invasion of Ukraine.
Diesel's role in the transport supply chain is feeding into surging producer prices, which can stoke inflationary pressures as Americans increasingly feel squeezed by affordability.
The diesel price jump precedes the autumn high season, when the fuel powers agricultural equipment to harvest and transport crops, and Corn Belt grain farmers say rising fuel and fertiliser prices are eating into profits.
Related Articles:
US Diesel Prices Soar To Record High— US diesel pump prices reached a record average of $5.85 a gallon, according to the American Automobile Association, surpassing the previous high. Harvest season demand, early winter heating needs, and planned US refinery maintenance are likely to squeeze diesel supplies further.
U.S. Economy Less Vulnerable To Geopolitical Oil Price Shocks Than In The Past— The United States became a net oil exporter in late 2019, and oil and oil product spending fell from near 8% of GDP in 1980 to 3% in 2024. The authors estimate a 15% global oil supply disruption would now cut annualized U.S. real GDP growth by 0.3pp, versus 1.7pp in the rest of the world.
Fighting Words: The Energy Transition in 2026— Estimates based on primary energy overstate how much electricity is needed to replace oil in passenger cars, since electric motors convert 80%-90% of electricity into motion versus about 18% for gasoline cars. Measuring useful final energy net of waste heat avoids this "primary energy fallacy": the US consumed 45 exajoules of useful final energy versus 95 exajoules of primary energy.
AI Summary.US diesel pump prices reached a record average of $5.85 a gallon, according to the American Automobile Association, surpassing the previous high. Harvest season demand, early winter heating needs, and planned US refinery maintenance are likely to squeeze diesel supplies further.
Malcolm MooreFinancial Times
Date Posted:
US retail diesel prices have climbed to an all-time nominal high of $5.85 per gallon. The previous nominal high in January 2022 would be $6.54 in current dollars.
Are seasonal demand and refinery maintenance pushing diesel prices to records?
Core argument: US diesel pump prices averaged $5.85 a gallon for the first time on Friday, according to the American Automobile Association, eclipsing the previous record set after Russia's full-scale invasion of Ukraine in 2022.
[Diesel] pump prices hit an average of $5.85 a gallon for the first time ever on Friday, according to the American Automobile Association, eclipsing the previous record level that was reached in the aftermath of Russia’s full-scale invasion of Ukraine in 2022. From October, diesel is likely to be squeezed further by the harvest season, early winter heating demand and planned maintenance by US refineries. About three-quarters of diesel in the US is used for transportation and trucking goods, and the fuel is also essential for agriculture, powering much of the farm equipment used in the upcoming harvest season.
Takeaways by Macro Roundup® AI
US diesel pump prices averaged $5.85 a gallon for the first time on Friday, according to the American Automobile Association, eclipsing the previous record set after Russia's full-scale invasion of Ukraine in 2022.
From October, US diesel is likely to be squeezed further by harvest season, early winter heating demand and planned maintenance at US refineries.
About three-quarters of US diesel is used for transportation and trucking goods, and the fuel also powers much of the farm equipment used in the harvest season.
Related Articles:
US Diesel Prices Soar As Donald Trump Hauls In Refiners— Wholesale diesel prices in New York harbour rose almost 7% to $4.71 a gallon following US air strikes on Iran, a surge expected to raise consumer costs because diesel powers American industry and agriculture. The US president summoned refiners including Marathon Petroleum, Phillips 66, Chevron and Valero Energy to press them to curb fuel price inflation.
U.S. Economy Less Vulnerable To Geopolitical Oil Price Shocks Than In The Past— The United States became a net oil exporter in late 2019, and oil and oil product spending fell from near 8% of GDP in 1980 to 3% in 2024. The authors estimate a 15% global oil supply disruption would now cut annualized U.S. real GDP growth by 0.3pp, versus 1.7pp in the rest of the world.
Fighting Words: The Energy Transition in 2026— Estimates based on primary energy overstate how much electricity is needed to replace oil in passenger cars, since electric motors convert 80%-90% of electricity into motion versus about 18% for gasoline cars. Measuring useful final energy net of waste heat avoids this "primary energy fallacy": the US consumed 45 exajoules of useful final energy versus 95 exajoules of primary energy.
